Thursday, August 02, 2018

Recently I've spotlighted the extent to which silver loading boosted ACA marketplace enrollment among those with incomes between 200% and 400% of the Federal Poverty Level (FPL) - -that is, those at the higher end of subsidy eligibility. The boost occurred both in the 39 HealthCare.gov states and in California.

"Silver loading" refers to discounts in bronze and gold plans for subsidized marketplace enrollees generated by Trump's cutoff last October of direct federal reimbursement for the Cost Sharing Reduction (CSR) subsidies insurers are obligated to provide to low income enrollees who select silver plans. See note at bottom for an explanation.

The discounts proved more attractive to those with incomes over 200% FPL, because for most buyers below that income level, the value of CSR outstripped that of the bronze/gold discounts on offer. Compared to 2017 enrollment levels, 2018 enrollment in both HealthCare.gov states and California at 201-400% FPL outperformed enrollment below 200% FPL by about 8 percentage points.

The concentration of that enrollment boost has modestly shifted the income distribution of ACA enrollees. Historically, a majority of enrollees nationally have been eligible for the strong CSR available to those with incomes up to 200% FPL, and that's still the case. But the majority is a bit smaller.

Here is the shift in income distribution among the subsidized in HealthCare.gov states and California in 2018.

Since the subsidized population skews slightly wealthier in 2018, it's not surprising that it's also somewhat older:

Enrollee age distribution: HealthCare.gov, 2017-2018

That lines up rather strikingly with the shift in enrollee income brackets:

I can't compare the age shift in California, because the compilers at CoveredCa changed the age brackets in 2018. But the percentage of enrollees aged 45-64 actually downticked slightly, from 51.7% in 2017 to 50.9% this year. As a Covered California report noted, the state's risk scores are considerably better than the national average. Overall enrollment was up 3% in 2018, and unsubsidized enrollment (on- and off-exchange) dropped more modestly than nationally. Hence California may have widened its risk pool advantage this year.

In HealthCare.gov states, it appears that enrollment losses concentrated in the 100-200% FPL bracket correspond to an aging of the risk pool.

Footnote: the jump in enrollment over age 65 is interesting, though maybe the numbers are too small to be statistically significant. Over-65s are probably legally present noncitizens who don't have enough work history to qualify for Medicare. I enrolled a couple of immigrants' parents in this category myself, into 94% AV silver with very low premium, albeit also very narrow network. The cost, IIRC, was $900+ per month.

---

* The totals for Hc.Gov enrollment up to 200% FPL includes estimates of enrollment below 100% FPL, which CMS now rolls together with enrollment over 400% FPL (and in 2017, with those who did not report income as well). The bases: 1) In 2016, under-100% FPL enrollment was reported to be 3% of enrollment among those who reported income (i.e., 93% of all enrollees) in HealthCare.gov states. 2) CoveredCA does report income below the normal marketplace eligibility threshold, which is 138% FPL because CA is an expansion state. It was 2.6% of enrollees in 2018 and 2.7% in 2017. I used those percentages of total enrollment to estimate below-100% FPL enrollment on HealthCare.gov at 248,000 in 2017 and 227,000 in 2018. Most enrollees below the normal eligibility threshold are legally present noncitizens subject to a federal 5-year bar from Medicaid eligibility, or more stringent state standards. In California, a bit over 1/3 of those below 138% FPL are unsubsidized, e.g., may have an offer of insurance from an employer.

** Whereas the totals for Hc.Gov are as of the end of Open Enrollment, before many enrollees have paid their first premiums, the California numbers are as of March in each year, once coverage has been effectuated. The comparisons are apples-to-apples within each marketplace. It's possible that attrition affects different enrollment cohorts somewhat differently in California, however, so there could be some slight distortion in the breakouts.

A note on those bronze and gold plan discounts

When Trump cut off federal reimbursement of insurers for the Cost Sharing Reduction subsidies they're legally required to provide to lower income ACA marketplace enrollees who select silver plans (57% of marketplace enrollees in 2017), most states allowed or required insurers to concentrate the cost of CSR in premiums for silver plans only. States in which 70% of individual market enrollees live also allowed insurers to sell cheaper silver plans off-exchange, with no CSR cost attached.

Since ACA premium subsidies are keyed to the price of the benchmark (second cheapest) silver plan in each rating area, subsidies rose to cover inflated silver premiums, generating often dramatic discounts in non-silver plans, i.e. gold and bronze (platinum availability and purchase is negligible). In many states, steep increases in silver plan premiums resulted in zero-premium bronze plans becoming available to many buyers (or nominal $1-3/month premiums), and gold plans that were either cheaper than silver or close in price.

Cheap gold plans were a particular boon to enrollees with incomes between 200% and 400% of the Federal Poverty Level (FPL). These buyers are not eligible for strong CSR, which makes silver plans roughly equivalent to platinum plans for buyers up to the 200% FPL threshold. Normally, enrollees in the 200-400% FPL range would pay between 6% and 10% of their income (percentage rising with income) for a benchmark silver plan with an actuarial value of 70%, i.e. with an average deductible of around $3600). With CSR priced into silver plans in 2018, gold plans (80% AV, with an average deductible of around $1100) came came within reach of many in this income range.

About Me

I'm a freelance writer focused mainly on the unfolding drama of Affordable Care Act implementation and health reform more generally.
I have a Ph.D. in medieval English literature and a propensity to parse the rhetoric and logic of our political leaders as well as that of media pundits and scholars who jump into the national debate. I wrote a dissertation on the remarkably humane and subtle medieval English anchorite Julian of Norwich, a mystic nun whose knack of squaring circles and framing paradoxes reminds me a little of our current president. A sampling of that work (mind the google gaps) is here: http://bit.ly/OzwsrR